Latin America is poised for a surge in deepwater investments, with regional capital expenditures (CAPEX) expected to surpass US$25 billion in 2024, as outlined in Wood Mackenzie’s newest report titled: ‘Latin America upstream: 5 things to look for in 2024.’
The continuing growth of deepwater projects remains a dominant theme in the region.
WoodMac said that while the number of floating production, storage and offloading (FPSO) vessel installations is anticipated to decrease in 2024, preparations for a larger number in 2025 are underway.
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“In Brazil, the sole FPSO install for the year is Mero 3, with further developments expected in the following year. In Guyana, the third FPSO is set for a ramp-up, and a final investment decision (FID) is anticipated for FPSO 6 in the esteemed Stabroek block,” the report outlined. That FPSO will be used for the Whiptail project. Set to produce 250,000 barrels of oil per day (bpd), Whiptail is on track for approval in the first quarter of 2024.
WoodMac pointed out that Mexico is witnessing a decline in deepwater exploration but said that 2024 is anticipated to be an active year for project sanctioning.
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WoodMac said in its report that Brazil and Argentina are projected to achieve record production levels, reaching four million barrels of oil equivalent per day (boe/d) and 1.5 million boe/d, respectively.
But despite these optimistic forecasts, WoodMac noted that the region faces potential challenges in the form of political and macroeconomic headwinds.
“The intricate balance between promising opportunities and external uncertainties adds a layer of complexity to the outlook for Latin America’s burgeoning deepwater sector,” the report outlined.
